Stocks Attempt Rebound After Sell-off… And The End Of Aan Era For The AI Trade? 11/6/26

Amazon.com

Across the shows: 44 speakers in other episodes, 57 bullish and 10 bearish calls, past 30 days

• Steve Grasso · Grasso Global Inc.Bullish

  Amazon's negative free cash flow is rewarded; slowed data center spending would benefit it most.

  Steve argues free cash flow is the market's barometer. Amazon was rewarded most among the megacaps because it has been free-cash-flow negative the longest, and AWS was up. If data center spending is slowed rather than halted, Amazon benefits most because it is effectively paid not to spend money. He contrasts Microsoft, which has never been free-cash-flow negative and did worst this week.

  “Amazon was rewarded the most because they were the ones that actually have been free cash flow negative... And if the data center business is going to be not halted, but slowed down, they'll probably benefit the most.”at 2:19

• Bonawyn Eison · CNBCBullish

  AWS growth shows AI capex is translating into revenue, and Amazon's valuation screens positive.

  The central scrutiny has been whether AI capex translates into revenue and profitability. Eison says AWS growth addresses that top-line question, and Amazon still has levers over the sequencing, timing and gross amount of capex. The valuation multiple also screens positive, since the stock is not priced like a speculative, expensive name, which he says is another positive for Amazon.

  “It does. ... I think one is AWS growth. I mean, lot of the scrutiny has been around whether or not the AI CapEx spend translates into revenue and profitability. And I do think that AWS at least addresses that top line number.”at 21:11

• Carter Braxton Worth · Worth Charting LLCBullish

  Amazon shows tremendous relative strength, as does Apple; momentum supports the mega-cap leaders.

  Worth argues relative strength is the factor that has historically proved momentum over time. Amazon exhibits tremendous relative strength, Apple as well, and even Microsoft. Because big marquee names like Amazon, Apple and Microsoft are holding up so well, he thinks something horrific next week is highly unlikely.

  “if relative strength is the factor that over time has proved that momentum, Amazon exhibits tremendous relative strength. Apple as well, even Microsoft.”at 22:21

Tesla

Across the shows: 31 speakers in other episodes, 36 bullish and 24 bearish calls, past 30 days

• Michael Khouw · OpenInterest.PROBearish

  Cybertruck is a commercial flop with sales far below forecast; Tesla should focus on profit drivers.

  Khouw says Tesla cancelled the S and X and is not selling many Cybertrucks, with under 20,000 units expected. The original forecast was 200,000 to 500,000 units. He says the design was too edgy and the price too high for him, and it never looked able to compete with the F-150 at that price point. Tesla should focus on things that actually drive profits, and the Cybertruck is not one of them.

  “But look, they had already canceled the s and the x as well. The fact is they're not selling a lot of these things. Less than 20,000, I think, is the unit sales that we're anticipating for this. ... They should be focusing on things that actually drive profits. This wasn't one of them.”at 26:31

• Steve Grasso · Grasso Global Inc.Bullish

  Steve is most excited about Tesla's Optimus robot, which he sees as the future of the company.

  Grasso says he is most excited about Optimus, arguing Musk wants cars to look like the future and that the future is robots. He thinks Cybertruck may have been too big a bet, but credits Musk for the vision. He notes the true momentum behind Tesla is the timing of a SpaceX merger, so the robot story is a long-term hope rather than a near-term catalyst.

  “I'm most excited about Optimus.”at 26:58

• Bonawyn Eison · CNBCUncertain

  Cybertruck pivot is the right move, but Tesla needs impairment disclosures before more conviction.

  Eison says the Cybertruck pivot to the future is the appropriate move. Tesla has fallen far short of its aspirational goal of about 250,000 Cybertrucks a year. He will have much more conviction once disclosures show the impairment charges, how much of the production can be redirected to the new build-out, and how much will be lost to obsolescence. He also flags Musk-related holdco concerns as a likely overhang.

  “As far as a cyber truck pivot, I think it's the appropriate move. ...they have fallen far short of that. I think the pivot into what is believed to be the future is the appropriate move. I will have a lot more conviction once the disclosures are made about what the impairment charges are.”at 28:27

Space Exploration Technologies

Across the shows: 50 speakers in other episodes, 66 bullish and 24 bearish calls, past 30 days

• Steve Grasso · Grasso Global Inc.Bullish

  Steve is fully invested in SpaceX and likes the stock more than Tesla, which he has exited.

  Grasso first played Musk's stocks through Tesla, then went long SpaceX. He now holds 100% in SpaceX versus no Tesla position, and continues to hold because he likes the stock. He flags that a possible SpaceX-Tesla merger and Musk-related investigations are questions after the midterms.

  “I'm a holder of SpaceX. I was playing it the cheap way on Tesla at first. Then I got long SpaceX. Now I'm a 100% in SpaceX versus no position in Tesla. I continue to hold. I like that stock.”at 27:22

NVIDIA

Across the shows: 79 speakers in other episodes, 72 bullish and 28 bearish calls, past 30 days

• Gary Marcus · New York University (professor emeritus)Uncertain

  Nvidia's AI-hype rally is fading; demand sustainability and buyers' profitability are open questions despite strong chips.

  He says investors got used to Nvidia as a rocket but sentiment has turned to skepticism, with trading driven by social media rather than fundamentals. He calls Nvidia well run with great chips, but questions whether demand is infinite and whether the companies buying the chips can make a profit. If faith in generative AI weakens, he expects that to hurt Nvidia.

  “To the extent that people lose faith in generative AI as being a rocket, that hurts a company like NVIDIA. I think NVIDIA is very well run. The chips are great. But there's a question about whether there's infinite demand.”at 37:34

OpenAI

Across the shows: 49 speakers in other episodes, 28 bullish and 40 bearish calls, past 30 days

• Gary Marcus · New York University (professor emeritus)Bearish

  OpenAI could become AI's WeWork; repeated IPO delays and a discounted sale risk hurt the AI trade.

  He has long argued OpenAI may be the WeWork of AI. He notes OpenAI keeps pushing back its IPO, and says a forced sale at a discount to Microsoft would hit a poster child for the AI trade and could weigh on Nvidia.

  “OpenAI, for example, I've long talked about as possibly being the WeWork of AI. WeWork never IPO'ed and OpenAI just keeps pushing their IPO back.”at 37:49

Anthropic

Across the shows: 109 speakers in other episodes, 135 bullish and 92 bearish calls, past 30 days

• Gary Marcus · New York University (professor emeritus)Bearish

  Anthropic's IPO valuation likely lands near $1.1T, not the $1.5T it wants, given weaker market mood.

  He says Anthropic reportedly wants to IPO at $1.5T but reporting suggests many people think $1.1T. He calls this a 25% haircut from the $2T talk a month earlier, and says the mood has worsened so the company is weighing whether it can get the higher number.

  “I just heard that Anthropic still wants to IPO at 1,500,000,000,000, but I was reading stories today saying a lot of people think the number is 1.1.”at 38:01

Airbnb

Across the shows: 3 speakers in other episodes, 34 bullish and 4 bearish calls, past 30 days

• Bonawyn Eison · CNBCBullish

  Airbnb's strong results make it the pick, but its hotel push and valuation gap with Booking are risks.

  She says the numbers are strong and cannot be argued against, and she sees the fundamentals as very strong. She is concerned that the push into hotels is surpassing its historical business. Airbnb trades around 33-34 times earnings against Booking's 14-15 times, so if they are competitors, valuation compression is a real looming threat.

  “Airbnb, I mean, there's no fighting against the numbers... if you look at them as a platform and compare them to say a booking, Airbnb trading at 33, 34 times, booking trading at 14, 15 times, that valuation compression, if they are in fact competitors, is a real threat.”at 39:46

VanEck Semiconductor ETF

Across the shows: 9 speakers in other episodes, 2 bullish and 8 bearish calls, past 30 days

• Carter Braxton Worth · Worth Charting LLCBearish

  SMH broke down from converging trend lines and should fall further into support.

  He says the semiconductor ETF broke down from a formation of converging trend lines, after bouncing to the same level and then breaching it. He expects a further move down into support, which he compares to a mattress top that you sink into.

  “What you'll see here is similar kind of lines but the key is the breaking down from this formation... Where you bounce to the penny, to the penny, but this time the breach. Where might we be headed? ... I think we go a bit further into support.”at 41:36

Consumer Staples Select Sector SPDR Fund

• Michael Khouw · OpenInterest.PRONeutral

  Staples ETF XLP works as a short-term tactical trade, not a long-term growth holding.

  He pivoted into XLP two weeks ago and it has outperformed the S&P 500 by about 10% through the prior day. He calls it a strategic move over the short term, saying staples are not a growth area and not a long-term investment.

  “Basically a strategic move over the short term. It's not a long term investment. You wanna be in the areas that have some growth and that's not going to be staples in the long run.”at 43:23

Devon Energy

Across the shows: 2 speakers in other episodes, 2 bullish and 0 bearish calls, past 30 days

• Michael Khouw · OpenInterest.PROBullish

  Devon Energy trades cheap near five-year lows; activist pressure on asset sales may spark a rebound.

  He says the stock trades near five-year lows at a very cheap multiple, partly because investors worry it is not aggressive enough on asset sales. Activists are kicking the tires, and he thinks the damage may be overdone. Heavy January 45 call buying suggests traders expect a comeback, and the stock needs to recover less than half of its recent three-day loss for those calls to pay off.

  “This thing is trading down around five year lows at this point. It's trading at a very cheap multiple... people are concerned that the company is not being aggressive about asset sales, and you got some activists kicking the tires.”at 45:17

Berkshire Hathaway

Across the shows: 5 speakers in other episodes, 3 bullish and 0 bearish calls, past 30 days

• Bonawyn Eison · CNBCBullish

  Berkshire B shares offer similar safety with better revenue growth and a less full valuation.

  As a final trade, she says Berkshire B shares offer the same type of safety as the defensive names discussed, with better revenue growth and a less full valuation.

  “Think Berkshire V shares offer the same type of safety with better revenue growth and less full valuation.”at 47:09

US stock market outlook

• Carter Braxton Worth · Worth Charting LLC

  Market structure is worse than a month ago; defensives overbought, semis and Caterpillar badly damaged.

  Worth says the index is only a few percent off its high, but internal structure has deteriorated. Over a month Home Depot and McDonald's rose 20% while Caterpillar and semiconductors fell about 30%. The defensive 'sponges' that absorbed money are now full and overpaid, and the damaged groups do not recoup such hits quickly. Breadth has been deteriorating for months, and the pieces are worse than they were days ago.

  “Internally, and this is a problem and it's been a problem for months, the [breadth] was always deteriorating and now we've seen how that plays out. But structurally, we're much worse right now than we were just days ago.”at 6:14

• Bonawyn Eison · CNBC

  AI and tech derating over the past month suggests the market is closer to a bottom, though not called.

  Eison agrees the rotation is real and lowers the market's earnings and revenue growth prospects versus when capital was in higher-growth areas. He argues beta and concentration risk have come out, and because the AI and tech complex has derated for about a month, the market is closer to a bottom. He is not calling one; this is a sustained rotation, and yesterday looked like a capitulation-style scare.

  “because the derating in the AI and tech complex has happened over the past month or so, I would think that we are closer to a bottom. I'm not calling one, but this isn't a one off, one day selling that we've seen.”at 7:04

• Steve Grasso · Grasso Global Inc.

  Markets have been up one year after every midterm election, 20 of 20 times, so the outlook is positive.

  Grasso points out that the market has been up a year out after every midterm, 20 out of 20 times, and that the average annual gain is about 10%. He acknowledges the sample size is not huge, but the consistency is striking, so he thinks the market should be higher a year after the midterms.

  “20 out of 20 when it flips the markets up a year out. ...But when you look at it after a midterm, I mean, that sample size granted, it's not huge, but it's 20 out of 20.”at 8:57

• Carter Braxton Worth · Worth Charting LLC

  The S&P 500 undercut support again, so he expects it to move lower.

  Using trend lines drawn several ways, he says the S&P 500 bounced to the same level but this time was undercut. Support now sits at the highs, so he thinks the index goes lower.

  “This is the S and P, and it bounces to the penny. And it bounces to the penny. But this time, it's undercut. My thinking is we go lower.”at 41:11

• Carter Braxton Worth · Worth Charting LLC

  Consumer staples show no relative alpha over a decade; a no-go zone to stay away from.

  Staples have risen over ten years in absolute terms, but their relative performance against the S&P 500 has been falling. He concludes there is no alpha in the sector and tells viewers to stay away.

  “So it's been going up for ten years, but it's been going down. There is no alpha here. This is a no go zone. Stay away.”at 41:55

• Carter Braxton Worth · Worth Charting LLC

  Health care has underperformed but shows a bearish-to-bullish reversal setup; he likes it within defensives.

  He says health care has underperformed the S&P 500 on a relative chart, but the chart now shows the makings of a bearish-to-bullish reversal. Of the defensive sectors he covered, health care is the one he likes.

  “Health care, final chart, has been under performed. But guess what you've got here? You've got the makings of a bearish to bullish reversal. Healthcare, I like within defensive.”at 42:26

• Michael Khouw · OpenInterest.PRO

  A buying opportunity is coming soon in the market leaders that drove growth over recent years.

  He expects a buying opportunity pretty soon in the areas of the market that delivered the most growth over the last couple of years. He sees staples as a short-term hedge rather than the place for long-term growth.

  “I do like the idea that we're probably gonna see a buying opportunity pretty soon in the areas of the market that have provided the most growth over the course of the last couple of years.”at 43:42

• Bonawyn Eison · CNBC

  Nasdaq is already in a correction; scale in gradually, expecting about 10% more downside.

  She says the Nasdaq is already down 11%, which gives an argument for a correction. She thinks investors could start scaling into positions at the ETF or sector level, while accepting that the downside is probably another 10%.

  “overall, I mean, the Nasdaq is already down 11%. So you already have an argument for a correction there... understanding that your downside is probably down another 10%.”at 44:06

AI infrastructure & data centers

• Michael Khouw · OpenInterest.PRO

  Hyperscalers' AI capex is discretionary and their cash flow strong; spending-dependent firms remain vulnerable.

  Khouw says Meta and Alphabet have negative free cash flow because of heavy capex, but that capex is somewhat discretionary and their organic free cash flow is tremendous, so they can pivot and remain in a very good position. Companies that depend on that spending remain vulnerable. He adds that data center construction will not be completely ended and that the AI trade could cause some slowdowns, but he is not ready to call it finished.

  “...the CapEx that they are spending as big as it is, that is somewhat discretionary. They can pivot and their organic free cash flow is tremendous. ... But the companies that are depending on that spending remain vulnerable.”at 4:22

• Gary Marcus · New York University (professor emeritus)

  Models moving on-device means we won't need as much data center build-out as people expected.

  Marcus says a trend is emerging where models move local and run on home machines instead of the cloud, and smaller models will follow from optimizations. He concludes that the data center build-out does not need to be as large as people discussed. He also expects that after last week some projects will not be completed, with empty buildings and people pulling out of financing.

  “What we see as a trend is that models start to move local... In the end, we don't need as much data build out as people were talking about.”at 35:05

• Gary Marcus · New York University (professor emeritus)

  Neoclouds are the most vulnerable part of the AI build-out because they need costlier financing.

  Marcus argues neoclouds are the most vulnerable because they need financing and the financing is getting more expensive, so they are in trouble. He is worried about contagion, since if the neoclouds fall it could drive Nvidia down too. He also suggests that companies paid for each other in the build-out, and now the bill is due.

  “I think the Neo Clouds are the most vulnerable here, right? They need the financing. The financing is getting more expensive. They're in trouble.”at 35:53

• Gary Marcus · New York University (professor emeritus)

  Studies show little AI productivity gain, so the $2T AI buildout is a problem without visible results.

  He cites another Bank of England study of about 10,000 decision makers finding limited AI productivity gains. He argues that a roughly $2 trillion buildout is hard to justify if its results cannot be shown, and that this makes the spending a risk.

  “The other thing that came out this week is Bank of England had yet another one of these studies... again, not that much productivity. So having a $2,000,000,000,000 build out or whatever, if you can't show the results is a problem.”at 36:20

Oil & fuels

• Steve Grasso · Grasso Global Inc.

  Large integrated oil companies' earnings growth should be more durable than refiners'.

  He says refiners react immediately to moves in crude, while the large integrated names move more slowly. He argues the earnings growth of the large integrated names is probably more impressive and longer lasting than that of the refiners.

  “So the refiners really react immediately in the large integrated names are a little bit slower. And those earnings growth for the large integrated names are probably more impressive and longer lasting than you get in the refiners.”at 46:07

• Steve Grasso · Grasso Global Inc.

  Energy stocks have another leg up in them if the Iran conflict flares again.

  Energy stocks sold off along with crude this week. He says no new flare-up has come out of the Iran war yet but he thinks one might, and if it does energy probably has another act in it, even if the path for crude is lower.

  “we haven't heard another act coming out of Iran war and I think we might get one. I would say energy probably has another act in it.”at 46:26

• Michael Khouw · OpenInterest.PRO

  Undersupplied downstream refining will keep margins supported for some time.

  He says the downstream portion of the business is undersupplied, which will keep a bid under it for some time. He adds that even as everything else sorts itself out, the supply chain has a lot of catching up to do.

  “That... Look, downstream portion of this business, because it's so undersupplied right now, is going to keep a bid for some time. Even if everything else starts sort itself out, the supply chain has a lot of catching up to do.”at 46:46

Earnings & corporate profits

• Liz Ann Sonders · Charles Schwab

  Watch AI-related capex and earnings estimate revisions; the forward margin estimate looks stretched and may roll over.

  Sonders says the next focus is whether analysts cut estimates for CapEx and forward earnings, which should come within the next month as earnings season ends. The forward profit margin estimate has risen to 17-18%, which has gone parabolic. The beat size in third-quarter reporting has been subpar, so she sees a potential inflection point, possibly in the medium term rather than this quarter.

  “That forward profit margin estimate has gotten up to 17, 18%. It's kinda gone parabolic whether those estimates start to roll over”at 15:38

• Steve Grasso · Grasso Global Inc.

  Energy, tech and materials lead earnings growth, so those are the sectors to buy.

  He says earnings growth over the last two quarters has been in energy, tech and materials. He acknowledges headwinds but prefers buying the winners, because he thinks they run at a discount.

  “When I look at where the earnings growth is, those are the stocks and sectors you wanna buy. And the earnings growth for the last two quarters has been in energy, tech and materials.”at 42:43

AI bubble & tech valuations

• Carter Braxton Worth · Worth Charting LLC

  Semiconductor excess is being unwound; the mean-reversion process is likely not over.

  Worth compares semis with past manias such as precious metals. Semiconductors doubled in a three-month span from March 30 to June 22, which has only happened twice before since 1994 (1998 and 1999). The index has expunged some excess but still is up about 30% for the year. Semis led the market for three to almost four years and still lead, but the move was excessive, so the mean reversion is likely not over.

  “All we've done is expunged some of that excess. We're still 30% for the year. That's the nature of excess... Semis have led the market for three years, almost four. They're still leading the market again. But it was excessive. And so, mean [reversion] is a part of it. It's likely not over.”at 11:30

Market sentiment, positioning & volatility

• Liz Ann Sonders · Charles Schwab

  Positioning hasn't fully unwound; retail sold heavily and did not buy the AI selloff dip.

  Sonders says the Nasdaq 100 and the SOX are in oversold territory, but the position unwind may not be complete. She says positioning must be checked across cohorts, including long/short hedge funds that derisked, systematic funds and CTAs. Retail was not the dip buyer it has been in the past; it did heavy net selling in the last few days, so the market may not be fully washed out yet.

  “We might not have fully seen the position unwind... retail is not proven to be the dip buyers that they have been in the past. You saw a really heavy amount of net selling.”at 14:04

US rates & the Fed

• Liz Ann Sonders · Charles Schwab

  Inflation is driving the Fed toward a December hike; this jobs report does not change that.

  Sonders says inflation is the driver for hikes and remains on the table. Labor market data would be the signal for the Fed to stop hiking, and only real weakness would move it toward easing, which does not appear to be in the cards. There are small cracks such as the medium length of unemployment, but she does not think they change the likelihood of a 25 basis point hike in December.

  “I think inflation is the driver for hikes, and I think that that is still on the table. ...I don't think it changes the likelihood of the Fed hiking 25 basis points in December.”at 16:58

AI regulation & safety

• Gary Marcus · New York University (professor emeritus)

  Generative AI faces much more regulatory scrutiny after this week; it previously got a free ride.

  Marcus argues generative AI got a free ride because it was not scrutinized carefully or regulated at all. This week that changed, and there will be much more regulatory scrutiny on safety and whether companies made the right choices. Democrats lack the White House but will ask many questions, though not everything they promise will happen and Trump can override a lot. Nobody was prepared for it, which drove the selloff because companies might be held accountable.

  “The whole field of generative AI kinda got a free ride in a bunch of different ways. It wasn't scrutinized very carefully, wasn't regulated at all. And that's all gonna change now. It all changed this week.”at 33:21

Pharma & biotech

• Steve Grasso · Grasso Global Inc.

  Healthcare could be interesting ahead, with biotech coming back despite a patent cliff.

  He agrees with Carter's bearish-to-bullish reversal call on health care. He notes a patent cliff is coming up, but sees biotech returning, and he likes buying winners on a discount, so he thinks healthcare could be interesting going forward.

  “Healthcare is one. You have the patent cliff coming up. You have biotech coming back. So I think that one could be really interesting going forward.”at 43:05

Consumer & retail

• Bonawyn Eison · CNBC

  Consumer staples look full, and she is unsure how long the staples trade can continue.

  After the staples rally, she says the sector is probably full and she is not sure how long the trade can continue. She agrees with the other panelists that staples are not a long-term growth area.

  “Staples is probably full here, and I don't... I'm not sure how long that trade can continue.”at 44:36

AI chips & semiconductors

• Michael Khouw · OpenInterest.PRO

  Fear has inflated chip-stock option premiums, so traders should sell some of that premium.

  He says fear has driven up options premium in chip stocks. He argues that investors should be greedy when others are fearful, and so should sell some of that premium.

  “Fear has driven up options premium in the chip stocks, and you should be greedy when others are fearful, and I would get in there and start selling some of that premium.”at 47:18

Gold & precious metals

• Carter Braxton Worth · Worth Charting LLC

  Silver is down about 60% with buyers likely to drive a bounce, given its higher beta.

  He says silver is down 60% and that buyers are stepping in for a bounce. He notes silver has more beta than gold, and he suggests it is the seasonal time of year for silver and gold moves.

  “Silver down 60%, buyers for a bounce... It's the silver, not the gold this time? Both, but silver's got the jump. Juice the beta.”at 47:26